Round l on Business 26 March, 2015 Majestic Hotel Kuala Lumpur BEIM-CIB Round Table on Business Ethics A Report of Malaysia’s first Round Table on Ethics We all know the way. It is leaders however expect from you?” Such an approach, Mr. Ghandy that go the way and then show the way.” Puan elaborated, “Could potentially change the whole “ Shahreen Kamaluddin, a renowned author and environment. Instead of having a large number Advisor – Fellow of of adversaries, we could have a large number of the Institute of Public colleagues who can work and would want to work Relations Malaysia, with us.” made this profound Handing over the baton statement while to the Moderator of the addressing a gathering Round Table, Vivek that had come to Asrani, MD, Kaymo participate in Round Fastener Company a Table discussion on Small and Medium Business Ethics. This Enterprise (SME) in statement deftly summarized the spirit and intent Mumbai, Vivek set of Malaysia‟s first Round Table (RT) on Business the expectations of the Ethics. deliberations straight away – “We can leave from Organized by Business Ethics Institute of Malaysia here with lots of sharing of experiences and we (BEIM) and Caux Initiatives for Business (CIB), can walk away inspired.” He then when went on this RT held at the beautiful Majestic Hotel in to pose the first question that was to be the focus Kuala Lumpur on March 26, 2015 witnessed the of the first part of these discussions – “Why is it participation of 32 persons who came for just that difficult for business to be ethical?” – to encourage one another to pursue this path. Interestingly the wide gamut of responses not A path that not only made business a sustainable only kick-started the deliberations into a lively model but makes a positive impact on society at discussion but it also revealed two distinct camps. large and the environment. Below are some of the views that were shared in Welcoming the delegates from the 23 organizations response to this query. that had participated in this RT, J D Lovrenciear, • We live in an unequal world hence it is for Executive Director of BEIM called on the Director companies to decide how to engage in business of CIB, Sarosh Ghandy to introduce CIB and share with its competitors. a bit of its work especially in the context of the Malaysian RT. • Being unethical can hurt business in the long run. Though it is not easy to walk this path in “Ethics goes beyond the face of the competitive environment we just dealings with operate in, (as this involves making some tough money,” stated the decisions), in the end it pays off to be ethical. septuagenarian who had vast experience • It is not difficult to be ethical. in industry, retiring eventually a MD This last view then raised the immediate query: How of TELCON a Tata many believe it is easy to be ethical? Surprisingly Group company that 50% raised their hands but clearly the house was manufactured heavy equipment machinery. “It is divided. A healthy expression of views then came how one can lead with love rather than fear,” he to the fore: continued, setting the tone that raised the bar beyond • “Start-up businesses face the immediate just ethics in financial dealings. He then shared the challenge of financial pressures. It becomes need to be proactive in our approach where we ask difficult for an entrepreneur to stay along the – “What can I do for you?” rather than “What can I straight path with sustained delays and other proper environment to do business. On the other, challenges. Thus the need to survive often the competitor is always there to do what you are forces one to resort to unethical practices,” said not. So is not business also responsible for the state one. of corruption in the nation? Is corruption an enabler for growth? Being unethical can hurt business in By show of hands, again close to 50% agreed with the long run. Though it is not easy the view that businesses tend to rationalize that to walk this path in the face of the one needs to be pragmatic in the face-off with the ethical dilemmas. competitive environment we operate in, in the end it pays off to be ethical • „Runners‟ provide a service. They can help speed up the process of clearance or permissions in far less a time than one would take if one did the work oneself. It is very easy to rationalize • “While it is an issue of survival, there are that we are hiring “professional service” to sufficient examples of companies that have serve their ends. The dilemma is: Is it ethical? shown that it is possible to be ethical while still remaining competitive,” said another • Facing the reality on the ground, establishments continuing, “It is not possible to hold a stance need to factor in the time required for of being ethical on one day and not, on another. permissions as part of the cost of running a Most companies that remain ethical survive.” business. • Statistics have shown that the companies that remain ethical have grown 400% in a span of 10 years. The unethical companies tend to vanish after 18 years while the leaders of these business houses don‟t last beyond four years. • The media unfortunately, in an attempt to sensationalize news often, only reports the unethical practices that go on. The good business practices often go unreported. Citing a couple of examples the speaker then revealed how he had encountered a few small business establishments that sold their products with a very small profit margin because it met their needs. “It is a classic, exemplary story that does not show up in the columns of media reports,” • Corruption is like cancer. If allowed the first he concluded. few times, it soon becomes part of the business culture. • There are entrepreneurs that want to be ethical. However the processes are lengthy and very • “However,” countered another, “there are time consuming. Hence it becomes difficult to situations when one is faced with injustice. sustain the costs due to such delays. What is then on the mind of the businessman is • It is difficult to be ethical and survive. how to cross it.” Backing this with an example, the speaker cited the time when he had a • There is a difference between ethics and business that manufactured food supplements. morality. When government makes things All these supplements had to be certified by an difficult, it forces even the moral to be unethical. authority in Malaysia equivalent to the FDA. “However,” he rued, “the waiting period ranged This prodded the Moderator to question: from two to five and a half years.” Who is responsible? On one hand there is the • “We have 18 factories in Malaysia, three in expectation that the government should create the Indonesia and one in China with close to 11,000 • Practicing ethics is easy. However it is important employees,” shared a senior representative of a that this practice comes from the top. Giving leading production business house. “However the example of the Chairman of Top Glove for us,” he continued, “ethics is non-negotiable. Company, the delegate went on to say that this We emphasize that we need to walk the talk and has now become the culture in the company. stand firm. This is not only in our operations in • Disagreeing with the fact that ethics should Malaysia but in other countries as well.” start from the top, another delegate responded that “it must start with oneself. Do what you Practicing ethics does not mean need to do right, correctly and efficiently. Its outcome is that it brings everyone to a place different standards at home and work. where there is a lot of positive energy.” You cannot practice ethics at home • Practicing ethics does not mean different and not at work and vice versa standards at home and work. You cannot practice ethics at home and not at work and vice versa, was the view of another. • Comparing corruption to a leak in a ship, one • Bringing a philosophical view to the discussion, delegate recounted an incident where an MNC one delegate responded that there are three was charged with serious malpractices globally. principles that an individual can hold to: (i) Since one of the officers of this delegate‟s Accountability, where we bring ourselves to company had been implicated in one of the account; (ii) Personal Value, where we ask charges, the CFO of the company needed to ourselves, „What is the point of it all if after all take quick and serious cognizance of the matter. the money we are still unhappy,‟ and (iii) Trust. “It had the potential to seriously damage the Naming the multinational, Enron, the delegate reputation of the company,” said the delegate stated that it was very difficult to regain the before concluding, “No matter how small the trust once lost. leak is, it cannot be ignored. Sooner or later it would sink the ship.” • There is a cost to being ethical. The question is – Are we willing to pay the price? • “Challenges with ethical issues not only affects small companies but also big businesses,” said Summing up the first part of the deliberations that another officer of an MNC. He then went on took over an hour, the Moderator, Vivek Asrani to cite a couple of incidents to show how he then called for a short coffee break saying, “Having had to take a stand and how it was backed up now looked at the challenges in doing business by his superiors.